SINGAPORE Aug 13 South Korean buyer YNCC and
sellers have reached deadlock in their naphtha term talks as all
parties were entrenched in their ideas, traders said on Monday.
They added that this could lead to cancellation of the
tender for naphtha cargoes originally meant for September 2012
to August 2013 delivery.
"Given that there are no conclusions to YNCC's latest term
tender, the tender may be cancelled," said a trader.
YNCC had placed bids at $1.50 a tonne premium to Japan
quotes on a cost-and-freight (C&F) basis but these failed to
interest suppliers, who quoted offers from $5.00 a tonne
"YNCC came out at the wrong time as the high naphtha prices
in Europe, supported by gasoline, are influencing prices in
Asia," a Singapore-based trader said.
Rival company Honam Petrochemical was out in late June and
secured term parcels at prices ranging from a discount of 50
cents to a premium of 50 cents.
"Prices are now in premium compared to when they were at a
discount, when Honam Petrochemical was out in the market for
term cargoes," the trader added.
YNCC has an existing contract which expires in December. The
deal was for around 800,000 tonnes of naphtha for 2012 delivery
at a discount of 50 cents a tonne to Japan quotes on a
cost-and-freight (C&F) basis with about seven sellers.
Naphtha is a feedstock for petrochemical products including
(Reporting by Seng Li Peng; Editing by Anthony Barker)